Retail revenue fell to 603 million pounds ($869 million) in the three months through December, London-based Burberry said Thursday in a statement. Analysts predicted 606 million pounds, based on the median of estimates compiled by Bloomberg. Sales were unchanged on a comparable basis, missing internal expectations, compared with a 4 percent decline in the second quarter, Burberry said.
Hong Kong sales fell more than 20 percent. The U.K.’s largest luxury-goods maker is scaling back stores, cutting bonuses and consolidating products under one label after forecasting earnings will probably fall for a second straight year. Richemont reported Christmas season sales declined for the first time since 2008 .
Tourist bookings to Europe have declined following the terror attacks in Paris and an unseasonably warm winter has added to challenges facing luxury companies. Burberry is also more exposed than peers to spending by Chinese clients, which is cooling as that country’s stock market slumps.
The company anticipated in October a return to growth in last part of 2015, driven in part by new products such as lightweight cashmere trenchcoats and ponchos, and new styles of scarves.
By Andrew Roberts; editors: Matthew Boyle, Thomas Mulier.